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Lessor (3.) Net Investment in the Lease

Lessee's (5.) Right of Use 1 - 4 and (6.) Lease Liability 1 - 4

Each of the four independent situations below describes a sales-type lease in which annual lease payments of $17,000 are payable at the beginning of each year. Each is a finance lease for the lessee. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 2 2 93 Situation 2 3 2 2 3 3 98 9$ 4 2 5 98 Lease term (years) Asset's useful life (years) Lessor's implicit rate (known by lessee) Residual value: Guaranteed by lessee Unguaranteed Purchase option: After (years) Exercise price Reasonably certain? $ 6,800 0 $3,400 $3,400 0 $6,800 none n/a n/a 1 $ 8,400 no 2 $2,400 no 3 $4,400 yes Determine the following amounts at the beginning of the lease: (Round your final answers to nearest whole dollar.) Answer is not complete. Situation 2 3 A. 34,000 $ 34,000 34,000 34,000 40,800 55,400 55,400 40,800 3. The lessor's: 1. Total lease payments 2. Gross investment in the lease 3. Net investment in the lease The lessee's: 4. Total lease payments 5. Right-of-use asset 6. Lease liability B. 34,000 34,000 34,000